VA House Loan Rate: What You Need to Know

The Ins and Outs of VA House Loan Rates

Welcome to our comprehensive guide on VA house loan rates. If you are a veteran or an active-duty service member looking to buy or refinance a home, then the VA loan program may be the perfect option for you. But before you dive into the application process, it’s essential to understand the VA loan rate and how it should affect your decision. In this guide, we’ll discuss everything you need to know about VA house loan rates, so let’s get started!

What are VA House Loan Rates?

VA house loan rates are the interest rates applied to VA home loans. This unique loan program is available to eligible veterans, active-duty service members, National Guard members, and surviving spouses. VA loans are backed by the U.S. Department of Veterans Affairs, which means the government guarantees a portion of each loan to protect the lender against losses.

As a result, VA loans typically come with more favorable terms than conventional loans, including lower interest rates. However, VA loan rates are not universal and can vary depending on several factors, such as credit score, loan term, loan amount, and current market conditions.

What Are the Current VA Loan Rates?

The current VA loan rates vary depending on the lender and the borrower’s credit score and financial history. However, at the time of writing (September 2021), the VA loan rate for a 30-year fixed-rate mortgage averages around 2.875%. Meanwhile, the rate for a 15-year fixed-rate mortgage is approximately 2.25%.

Loan Type
Interest Rate
30-Year Fixed-Rate Mortgage
15-Year Fixed-Rate Mortgage

Factors That Affect VA House Loan Rates

As mentioned, VA loan rates are not a one-size-fits-all scenario. Several factors can influence the interest rate you receive on your VA home loan. Let’s take a closer look at some of these factors below.

Credit Score

Your credit score is one of the most critical factors in determining your VA loan rate. The higher your credit score, the better interest rate you’re likely to receive. People with excellent credit scores can take advantage of VA loan rates that are significantly lower than those offered to individuals with poor credit scores.

Loan Term

The length of your loan term can also affect your VA loan rate. Typically, shorter loan terms come with lower interest rates, while longer loan terms come with higher interest rates. A 15-year VA loan may have a lower interest rate than a 30-year VA loan.

Loan Amount

The loan’s principal amount can also impact the VA loan rate. In general, borrowers who opt for a higher loan amount may receive a higher interest rate than those who take out a smaller loan.

Market Conditions

The current housing market also plays a significant role in VA loan rates. If the market is experiencing high levels of demand, then interest rates are likely to be higher. Meanwhile, if there’s low demand, then interest rates may decrease.

FAQs About VA House Loan Rates

What is the VA loan rate for a 20-year mortgage?

The VA loan rate for a 20-year mortgage varies depending on the lender and the borrower’s credit history. However, it generally falls somewhere between the rates offered for a 15-year and a 30-year mortgage.

What is a good VA loan rate?

A good VA loan rate is one that is lower than the average interest rate in the current market. Generally, a rate between 2.5% and 3% is considered a good rate by most lenders.

Can I negotiate my VA loan rate?

Yes, you can negotiate your VA loan rate with your lender. However, the amount of negotiation you can do will depend on the lender’s policies and your credit history.

Is it better to get a fixed or adjustable VA loan rate?

Fixed VA loan rates are generally considered more stable, predictable, and suitable for most borrowers. Adjustable VA loan rates may initially be lower, but they are subject to change, which could result in higher interest rates down the line.

Does the type of property I’m buying affect my VA loan rate?

Yes, the type of property you’re buying can affect your VA loan rate. For instance, if you’re purchasing a multi-unit property, your interest rate may be higher than if you were buying a single-family home.

What are discount points in relation to VA loan rates?

Discount points are prepaid interest that borrowers can pay upfront to lower their VA loan rate. Each discount point is equal to 1% of the loan amount. Paying discount points can help lower your monthly mortgage payment, but it may not be a viable option for everyone.

Can I refinance my VA loan to get a better interest rate?

Yes, you can refinance your VA loan to get a better interest rate. This process is known as a VA Interest Rate Reduction Refinance Loan (IRRRL), which allows you to refinance your existing VA loan into a new loan with a lower interest rate.

Can I get a VA loan with a low credit score?

Yes, you can still get a VA loan with a low credit score, but you may need to pay a higher interest rate. Borrowers with a credit score of 620 or lower may have difficulty qualifying for a VA loan.

What are the benefits of a VA loan compared to a conventional loan?

VA loans offer several benefits compared to conventional loans, including lower interest rates, lower down payments, no private mortgage insurance (PMI) requirements, and more relaxed credit score and debt-to-income requirements.

What is the max amount for a VA loan?

The maximum amount for a VA loan varies depending on the location of the property. In most areas, the maximum loan amount for 2021 is $548,250. However, in some high-cost areas, the limit can go up to $822,375.

Can I use a VA loan to buy a second home?

No, you cannot use a VA loan to buy a second home or investment property. VA loans are only available for primary residences.

What happens if I fall behind on my VA loan payments?

If you fall behind on your VA loan payments, you may face foreclosure proceedings. However, the VA provides several resources to help struggling borrowers manage their loans and avoid foreclosure.

What are my options if I can’t qualify for a VA loan?

If you can’t qualify for a VA loan, you may consider other loan options, such as conventional loans, FHA loans, or USDA loans. Be sure to research and compare different loan programs to find the right fit for you.

The Bottom Line

VA home loans offer a unique opportunity for eligible veterans and active-duty service members to become homeowners. However, it’s crucial to understand the VA house loan rate and how it can impact your financial health in the long term. If you’re considering a VA loan, be sure to explore your options, compare rates from different lenders, and work with a knowledgeable professional to make the right choice for you and your family.

Start Your VA Loan Application Today!

If you’re ready to explore your VA loan options further, start your application process today via the VA’s official website or your preferred lender. Take advantage of the benefits that come with a VA loan and start your journey towards homeownership now!


The information in this article is designed to be helpful but is not exhaustive. The terms and conditions of VA loans are subject to change, and not all borrowers will qualify for all loans. This article is not intended to be financial advice and should not be relied upon as such. Please consult with your financial advisor or lending institution to learn more about your options and to determine which loans may be right for you.